Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision H - Period of deductibility of certain advance expenditure  

SECTION 82KZO  

82KZO   PARTNERSHIP CHANGES WHERE ENTIRE INTEREST IN AGREEMENT RIGHTS IS NOT TRANSFERRED  

Where:

(a) under an agreement entered into after 25 May 1988, a person (in this section called the original person ), or the partners in a partnership (in this section called the original partnership ), incurs or incur expenditure in return for the doing of a thing during a period after the incurring of the expenditure;

(b) either of the following (in this section called a partnership change ) happens:

(i) a partnership is formed or the original partnership is dissolved, or both; or

(ii) the constitution of the original partnership, or the interests of the partners in the original partnership, is or are varied;

with the result that, after the partnership change:

(iii) a person (in this section called the later person ), or the partners in a partnership (in this section called the later partnership ), holds or hold all of any rights under the agreement to have the thing done during the period after the partnership change; and

(iv) the original person, or one or more of the partners in the original partnership, has an interest in the rights after the partnership change; and

(c) the whole or part of a deduction under former section 51 of this Act or section 8-1 of the Income Tax Assessment Act 1997 in respect of the expenditure (which whole or part is in this section called a spread deduction ) is, because of the application of this Subdivision, allowable from the assessable income of the original person or the original partnership of the year of income in which the partnership change happens or a subsequent year of income;

the following provisions have effect:

(d) if a spread deduction is allowable in relation to the year of income in which the partnership change occurs - the entitlement to the deduction shall, for the purposes of this Act but subject to any later application of this section, be apportioned between the original person or original partnership and the later person or later partnership according to the portions of the eligible service period in the year of income (or, if the case requires, of so much of the period as occurs after a partnership change resulting from a previous application of this section) that occur before and after the partnership change;

(e) if a spread deduction relates to a subsequent year of income - the later person or later partnership, instead of the original person or original partnership, shall, for the purposes of this Act but subject to any later application of this section, be entitled to the deduction;

(f) for the purposes of any later application of this section or section 82KZN , the later person or later partnership, instead of the original person or original partnership, shall be taken to have incurred the expenditure under the agreement.